2 stocks to buy after raising their outlook for the full year
Concerns about the Federal Reserve tightening monetary policy to control soaring inflation, the war between Ukraine and Russia and a potential economic slowdown have weighed on investor sentiment so far this year. In addition, several analysts believe that the Fed’s policy could slow the economic recovery and possibly tip the economy into a recession. According to a Moody’s Analytics study and a Wall Street Journal survey of economists, the odds of a recession are about 30%.
In addition, other headwinds in the market, such as rising energy oil prices, the Russian-Ukrainian war and aggravated supply chain disruptions are not expected to subside anytime soon and could keep volatility going. of the market. However, in the current turbulent market environment, a few companies performed well and raised their outlook for the full year. Moreover, based on their strong growth attributes, they could gain significantly in the near term.
Against this backdrop, we think it might make sense to bet on the stocks of fundamentally sound companies Nordstrom, Inc. (JWN) and Synopsys, Inc. (SNPS).
Nordstrom, Inc. (JWN)
Based in Seattle, Washington, JWN operates as a fashion retailer and offers apparel, footwear, beauty products, accessories and homewares for women, men, young adults and children. It offers a range of branded and private label products through various channels, such as Nordstrom branded stores and online.
JWN raised its annual outlook, testifying to the momentum of its business, with shoppers visiting the company’s department stores to refresh their closets with designer labels and shoes. JWN now expects its fiscal 2022 revenue, including credit card sales, to grow 6% to 8%, from a previous range of 5% to 7%. It forecast earnings per share, excluding the impact of any buyback activity, in the range of $3.38 to $3.68, up from a previous range of $3.15 to $3.50. .
For the first quarter, ending April 30, 2022, JWN’s total revenue increased 18.6% year-on-year to $3.57 billion. Its net profit was $20.00 million, compared to a net loss of $166.00 million in the prior period. The company’s EPS was $0.13, compared to a loss of $1.05 per share in the year-ago quarter.
Analysts expect JWN’s revenue to grow 8.5% year-over-year to $3.97 billion for the second quarter, ending July 31, 2022. The consensus estimate EPS of $0.82 represents a 67% year-over-year improvement for the second quarter, ending July 31. , 2022. In addition, it has an impressive track record of earnings surprises: It has exceeded consensus EPS estimates in three of the past four quarters. The stock has gained 13.2% year-to-date and 31% over the past three months.
JWN POWR Rankings reflect this promising prospect. The company has an overall rating of B, which translates to Buy in our proprietary rating system. POWR ratings rate stocks on 118 separate factors, each with its own weighting.
The stock also has an A rating for value and a B rating for growth and quality. In category B Fashion & Luxury Industry, it is ranked #17 out of 68 stocks.
To see additional POWR ratings for Stability, Sentiment, and Momentum for JWN, Click here.
Synopsys, Inc. (SNPS)
Based in Mountain View, Calif., SNPS provides electronic design automation software products used to design and test integrated circuits. The company offers Fusion Design Platform, Verification Continuum Platform, and FPGA design products that are programmed to perform specific functions.
The company hasrevised its guidance for fiscal year 2022. It expects earnings of $8.63 to $8.70 per share on revenue of $5 billion to $5.05 billion, against Wall Street projections for annual earnings of $7.90 per share on earnings. sales of $4.81 billion. “For fiscal 2022, we expect to grow our annual revenue by approximately 20% and cross the $5 billion milestone, further drive operating margin expansion, increase earnings per share by more than 25% and generate approximately $1.6 billion in operating cash flow,” said De dit Geus.
Recently, SNPS announced a significant expansion of its EDA data analytics portfolio with the introduction of Synopsys DesignDash design optimization solution. As an add-on product to the market-leading digital design family of SNPS and SNPS DSO.ai, the award-winning AI-based design space optimization solution, SNPS DesignDash, is a complete design solution. design optimization driven by data visibility and artificial intelligence. which enables unparalleled productivity in advanced SoC design.
For the second quarter, ending April 30, 2022, SNPS’ total revenue increased 24.9% year-on-year to $1.28 billion. His operating result improved 87.3% from its prior year value of $363.70 million, while its non-GAAP net income was $390.84 million, up 46, 3% compared to the quarter of the previous year. The company’s non-GAAP EPS rose 47.1% year over year to $2.50.
The consensus EPS estimate of $2.00 represents a 10.6% year-over-year improvement for the third quarter, ending July 31, 2022. Analysts expect revenue from SNPS rose 15.1% year-over-year to $1.22 billion for the third quarter, ending July. 31, 2022. Additionally, the company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates for the past four quarters.
SNPS’ strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which is equivalent to Buy in our POWR rating system. The stock also has an A rating for quality and a B rating for growth and sentiment. In category F Software app industry, it is ranked No. 11 out of 156 stocks.
In total, we assess SNPS on eight distinct levels. Beyond what we’ve stated above, we’ve also assigned SNPS ratings for value, momentum, and stability. Get all SNPS ratings here.
Click here to view our Software Industry Report for 2022
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Shares of JWN were trading at $26.02 per share Thursday morning, up $0.42 (+1.64%). Year-to-date, JWN has gained 16.74%, compared to a -12.93% rise in the benchmark S&P 500 over the same period.
Spandan’s is a financial journalist and investment analyst specializing in the stock market. Through its ability to interpret financial data, it aims to help investors assess a company’s fundamentals before investing. After…